CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Sofia Tryfonos Avraam and Anna Borovska, Scordis, Papapetrou & Co LLC
Conflicts of Interest and Transparency The Companies Law provides that the board of directors generally (and not only with regards to disclosure of issue of shares) need to disclose conflicts of interest where these exist; see 5.1 Requirement to Disclose a Deal and 7.1 Making a Bid Public . The Transparency Law imposes requirements on public listed companies and their shareholders regarding disclosure triggers once a sharehold - ing reaches a certain threshold; see 4.2 Material Shareholding Disclosure Threshold . 7.3 Producing Financial Statements A bidder intending to make a takeover bid is not required to produce financial statements in its announcement of intention to bid or its offer document. However, it is required to include in the bid reports on the steps to be taken to ensure a cash payment or the value of the con - sideration offered; and in the offer document information concerning the bid financing and the proposed consideration, when the consideration is composed of securities and the offer includes a profit forecast, a certification by independent accountants or auditors is required to the extent that such forecast was prepared on the basis of stated assumptions, and basic accounting prin - ciples applied by the offeror. Companies are required under the Companies Law to produce and submit to the RoC audited annual financial statements. Financial state - ments must comply with the International Finan - cial Reporting Standards (IFRS) and be audited in accordance with International Standards on Auditing (ISAs). As they are submitted annually to the RoC, they are a public record document. Furthermore, with regards to public listed com - panies on regulated markets, the Transparency
two daily national newspapers. The announce - ment must state the percentage of the securities
accepted in the target by the bidder. 7.2 Type of Disclosure Required
All Cyprus companies are subject to notification and disclosure requirements as specified in the Companies Law. Companies must, for example, notify the RoC of any share capital increases or changes to their capital structure. In addition, shareholder changes for private and public com - panies are notified to the RoC, whereas pub - lic (listed) companies need to comply with the regulations of the relevant stock exchange and any sector-specific requirements. All companies have an obligation to submit annual returns, set - ting out key corporate details including the issu - ance of shares. Such information is open to the public to inspect for a nominal fee. Directors of listed companies must report all relevant transactions to the CSE and CySEC and publish the transactions on the company’s website. Additionally, aside from sector-specific requirements, the companies may be obliged to make disclosures in accordance with the requirements of good corporate governance under the Market Abuse Law and the Transpar - ency Law. More specifically, the Market Abuse Law imposes disclosure obligations regarding inside information and inside dealings by acquir - ing or disposing of, for their own benefit, securi - ties to which inside information relates. The Code reinforces corporate governance practices requiring transparency and timely dis - closure of information in acquisitions in order to protect the rights of all shareholders in all cat - egories.
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